The Micro Dynamic of Exporting-Evidence from French Firms

This paper describes the dynamics of firms' exports to different countries. Using a panel of almost 19,000 French exporters, we define an export-relation as an observed positive export flow from a French firm to a destination. We establish the following facts: 1. There is a great deal of dynamics in firms' export relations that washes out at a more aggregate level; 2. Export values shipped by individual firms to specific destinations are very volatile: most of the changes occur within established export relations (intensive margin), with new relations or relations that are terminated (extensive margin) contributing little to adjustments in export value at firm level; 3. Export flows within a newly-created relation involve very small values, often inferior to 1000 euros; 4. Export-relations are also very volatile. Moreover, from year to year single firms create and destroy relations simultaneously, and countries are simultaneously involved in the formation and termination of relations; 5. Formation or termination of export relations and changes in export values are explained mostly by firm-country specific shocks; 6. The share of relations continued from one year to the next is correlated with country characteristics: it is higher in bigger and closer markets. We discuss how those findings could be related to different kinds of heterogeneous firm models and to a relation-specific trade model, arguing that the second one seems to fit more naturally all the documented facts.